Following in the footsteps of American solar panel manufacturers, the European Union unveiled plans late last week to introduce protective tariffs aimed at low-cost Chinese products.

The move comes nearly three months after the EU first began floating the idea pursuing action against what they were calling dumping from artificially priced Chinese panels. Reports released in March outlined EU complaints regarding unfair pricing and what they alleged was state support, allowing them to produce under cost and undercut EU producers.

The dumping, they said, was having a detrimental effect on the ability of EU manufacturers to stay above water. As previously reported on this blog, the dumping and ensuing oversupply helped drive down solar panel prices 24 percent over the last year. To get things moving in March, the EU leadership promised an investigation.

Launched by European Commission on behalf of EU Pro Sun, an industry association of solar producers from 20 EU countries, the investigation suggests that Chinese companies have been able to dump under market price solar panels and parts on European consumers at a loss thanks to significant financial support from the state. According to a New York Times report, the European Union represented 80 percent of China’s solar sales worldwide so the low prices undercut the local market to the tune of $26.5 billion last year, or 6.5 percent of all E.U. imports for that period.

The move drew complaints from China, who struck back with threats of possible tariffs of their own and a formal appeal to the World Trade Organization (WTO). IN March, China filed a formal complaint with the WTO, taking aim at member states including Greece and Italy, accusing them of offering a higher electricity tariff rates for domestic panel producers who used local components.

Despite the push-back, Europe promised action last week with a plan that would apply tariffs up to 67.9% on all panels that cross EU borders, under a plan from the 27-nation bloc’s body, according to a Wall Street Journal report. Starting June 6, tariffs would be applied, ranging from 37.3% to 67.9%, with larger producers taking on the lion’s share of the burden. The tariffs are a response to the pricing complaint, though a separate action will move forward regarding the state-support allegations.

With European solar producers already reeling from cuts in domestic subsidy programs and a wider economic slowdown, some are asking why the EU is moving forward with actions that may actually harm the local industry.

"Protective duties are poisonous for the solar industry", Udo Mohrstedt, chief executive of IBC Solar, a Germany-based global manufacturer told the BBC. "These guarding measures will endanger more than 70,000 jobs in medium-sized companies in Germany alone. The Commission must stop this dangerous protectionism."

European solar has taken a beating over the past three years as countries have tried to address the costs of stat subsidy programs with dwindling state coffers. In dramatic cases like Spain, government cuts have targeted the entire industry, going to far as to implement retroactive cuts, which has salted the earth in the eyes of foreign investors.

Further, the tariffs threaten to sour an already stressed trade situation with China. With 100 Chinese companies involved and about $27.2 billion in annual losses expected, this push is setting up what could be the EU’s largest trade dispute to date. China has already signaled that they will challenge any and all protective actions with appeals to the European Court of Justice and to the IMF, though they have made such claims since the process was announced in March, earning little response from EU leadership.

For now, the tariffs remain proposals and will be presented t the 27-member states during a meeting on May 15th.